November 2, 2011 / 5:31 AM / 8 years ago

UPDATE 3-Los Angeles Dodgers, MLB agree to sell the team

* Blackstone to run sales

* Sale to include team media rights, stadium

Nov 2 (Reuters) - The Los Angeles Dodgers, the bankrupt baseball team owned by real estate developer Frank McCourt, have agreed to be sold in bankruptcy court, ending their long-running battle with Major League Baseball.

The Dodgers had been pushing for a bankruptcy sale of only their future media rights, which they said could have raised the cash that McCourt needed to hold on to the team. The league argued from the beginning that it would only be satisfied by a sale of the team.

According to a joint statement by the team and the league issued early on Wednesday, both the team and the media rights will go up for sale in a process that will be run by the Dodgers’ financial adviser, Blackstone Group LP .

One potential suitor could be Ron Burkle, the investor and head of the Yucaipa Companies private equity firm.

When asked about the Dodgers on Wednesday, he did not address buying the team directly but said in a statement emailed by a spokesman, “It is one of the best brands in all of sports, and like many people, I’d be proud to be part of its future.”

The Dodgers filed for bankruptcy in June after the league’s commissioner, Bud Selig, rejected a proposed sale of the team’s broadcast rights to generate desperately needed cash.

Once in bankruptcy, the Dodgers continued to press for the sale of the broadcast rights, saying that it would raise enough cash to get the team out of bankruptcy protection.

The league argued in court, however, that the only way to end the Dodgers’ bankruptcy was to force McCourt to sell the team. The league had tried to oust McCourt as owner of the franchise by arguing he was draining the team’s financial lifeblood.

Fox Sports, which had a contract giving it the right to broadcast Dodger games, opposed an auction of the TV rights and is trying to hold on to those rights. Under a 2001 contract with the Dodgers, Fox said in court papers, it has exclusive negotiating rights through November 2012, giving it broadcast rights through the 2013 season.

The bankruptcy filing allowed the Dodgers to void their broadcast contract with Fox.

Fox, part of News Corp and a one-time owner of the team, is not interested in buying the Dodgers, according to a different source familiar with the matter.

Another possible suitor for the media rights is Time Warner Cable , but that company would not be interested in the team, according to a source familiar with the situation.

FOLLOWS DIVORCE SETTLEMENT

The news of a court-supervised sale comes after McCourt and his ex-wife, Jamie McCourt, announced that they had reached a divorce settlement in which Jamie McCourt would give up any rights to the team.

A tussle for control of the Dodgers had been going on since the couple began heading for divorce, with a judge ruling late last year that the team was owned jointly by the couple.

That ruling shot down arguments by Frank McCourt that the team belonged to him by virtue of a post-nuptial agreement the couple had signed.

As the legal battle for control continued, Jamie McCourt in May asked a judge to order the immediate sale of the franchise, accusing Frank McCourt of mismanagement. Frank McCourt put the team into bankruptcy the next month, saying it had run out of cash.

Frank McCourt has owned the team for seven years and during that time developed a reputation for high living. He and Jamie McCourt purchased multiple homes, flew private planes and ran up personal debts.

McCourt bought the team in 2004 for $430 million from Fox Entertainment Group, a division of News Corp, financing the purchase primarily with borrowed money.

The sale is expected to include the team, Dodger Stadium and surrounding parking lots, a package likely to sell for two to three times what McCourt paid, according to a report in the Los Angeles Times.

Mark Cuban, the owner of the Dallas Mavericks professional basketball team, told CBS Sports on Tuesday he was at one time interested in buying the Dodgers but felt the $1 billion price being asked by McCourt was too steep. Forbes magazine valued the assets at $800 million in March. Cuban was not immediately available for comment on Wednesday.

The new owner would be the third since Peter O’Malley sold the team to News Corp in 1998. The Dodgers had remained in the O’Malley family since its patriarch, Walter, moved the team from Brooklyn to Los Angeles in 1958, the Times said.

The bankruptcy case is In re: Los Angeles Dodgers LLC, U.S. Bankruptcy Court, District of Delaware, No. 11-12010

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